Date: Tue, 15 Dec 2009 21:35:49 -0800 From: Norm Matloff To: Norm Matloff Subject: Miano v. Wadhwa, and "loyalty" To: H-1B/L-1/offshoring e-newsletter (Sorry for my relative absence of late. I've got two pressing projects going. But I hope within the next few days to post my analyses of two major reports that have been released lately. Also, there are a couple of you whom I promised private feedback on your analyses. I have yet to deliver, but haven't forgotten and will respond soon.) Recently Vivek Wadhwa, the former CEO who has been quite critical of H-1B but nevertheless has been promoting the immigration of tech professionals, wrote a column that was pretty indendiary even by his standards. John Miano, founder of the Programmers Guild and currently a fellow with the Center for Immigration Studies, then wrote an equally-pointed blog posting in response to Vivek. I'm enclosing both postings below. I'm also going to discuss an article about immigrant techies deciding to leave the U.S. and return home. Vivek is quoted, and it ties in with some of his previous writings. In my view, it also ties in with John's comments in some ways. Indeed, my posting here will concentrate on that third article. I'll let John and Vivek fight it out themselves in print below. I will once again object, though, to Vivek's word "xenophobe"; people who are having trouble getting work in their field while the government is bringing in people to compete with them (and indeed undercut their wages) have a right to be upset without being called xenophobes. Actually, I wouldn't have used John's wording, "America bashers," either, at least not in describing Vivek. At any rate, I'll move straight to discussing the third article. The WSJ posts a notice asking that the article not be distributed, but you can currently view it at http://online.wsj.com/article/SB10001424052748704869304574595831070819244.html?mod=googlenews_wsj The thrust of the article is that many immigrant professionals are finding it difficult to get good jobs here, and are considering returning to their home countries. Most of the ones profiled in the article are naturalized U.S. citizens or permanent residents. Vivek, quoted in the article, says he expects 100,000 expat Indians, the so-called NRIs, to return to India in the next five years. My comments here will be along quite different lines from what I usually address. First, let me briefly say that I think Vivek's number and the overall theme of the article are exaggerated. One sees articles like this on occasion, and though they make good press, and many people do consider returning home, the fact is that most people are going to stay here. They have put down family roots, or their spouses have good jobs here, or they've actually investigated and found that opportunities for people like them (read: over age 35!) are limited back home, or they like the social freedom here (politics is not of interest to many techies, especially the immigrant ones) etc. I've mentioned before that the real trend is that fewer tech people will come to the U.S. in the first place, in the coming years. The number who go back is actually the less interesting figure. Nevertheless, many will indeed go back, and there is something about them that I want to talk about. Let me begin with two quotes: "By giving the foreign engineers and programmers fast-track green cards, we solve the H-1B problem, because THEY become US."--Paul Donnelly "America is not really a country. It's just a place where people come to make money."--Chinese immigrant engineer, quoted by John Derbyshire. Well, only a few of you will know who Donnelly is, and almost none of you know who Derbyshire is, so let me introduce them. Paul Donnelly is a former congressional staffer, and was also with the Congressional Commission on Immigration Reform in the 1990s. His former boss in Congress, Bruce Morrison, basically authored the legislation that established the H-1B program in 1990. Paul later worked for IEEE-USA, an organization that had long been critical of H-1B but was under heavy pressure by the IEEE parent organization to support skilled immigration. Paul got IEEE-USA to endorse a fast-track green card proposal. I strongly disagree with that notion, but the important point here is Paul's phrasing in the quote above. Derbyshire is a programmer, mathematician and author of books about mathematicians. He's married to a Chinese immigrant, and is a speaker of Chinese. Except for the part about authorship of math biography, Derbyshire's background is interestingly similar to my own, but in general his views are radically different from mine. He's very conservative politically, and is from my viewpoint a bit of a China basher. He presented the Chinese immigrant he quoted above as being typical. Bluntly, he views Chinese immigration as a security risk. I must say before continuing that I very strongly disagree with that perspective. But putting the security issue aside, one can talk in some sense of social loyalty, as I'll explain. Donnelly's and Derbyshire's points of view here are antithetical. Donnelly is saying that immigrants become "part of the family," while Derbyshire is saying that, at least in the Chinese case, they do not. Again, I think Derbyshire's portrait is greatly overdrawn. And I'm hardly a jingoistic, rah-rah America, European-culture-is-best type. I'm a native, but I grew up in an immigrant household (dad from eastern Europe), and if you were to visit my own home now, you'd actually find it to be the typical immigrant household--different language, different food, different viewpoints, etc.--and I've been quite active in the Chinese immigrant community. But that said, if many skilled immigrants of whatever nationality do go back home, one must question the wisdom of policies under which they immigrated here in the first place. First of all, one of the industry lobbyists' favorite lines is "We've educated these people, and if we don't keep them here, they'll return home and work for our foreign competitors." That line has always especially rankled me. The foreign competition idea doesn't bother me, and I on the contrary welcome the development of tech industries among Third World countries. But if the lobbyists are really worried about this as they claim, then the logical policy would be to not educate them here in the first place. The lobbyists would of course oppose this. So would I, but my point is that the lobbyists are not sincere. Most importantly, as Prof. AnnaLee Saxenian has shown, even those who do stay here participate to a remarkably high degree in the development of "foreign competitors," by investing, providing consulting advice and so on. So, the lobbyists' own arguments become turned against them, especially since those who return home, as Vivek claims will occur in large numbers, will now "work for our foreign competitors." But viewing things in a broader sense, I return to the two quotes I placed at the outset of this posting. Though the industry lobbyists describe the issue as merely one of bringing in (what they claim is) needed labor, I think the vast majority of us view immigration in Donnellian terms--we want THEM to become US. We do want them to become part of the family. We do want the U.S. to be a nation, populated by people who may be diverse in various ways but who do feel a keen sense of nationhood. Which brings me to my central point: Though I've always disagreed with Peter's Brimelow's view of immigration as a big threat to that sense of nationhood, I think we can all agree that the granting of a green card, and certainly of naturalization, does imply a certain commitment. Jumping ship at the first sign of economic trouble was not supposed to be part of the deal. Norm http://cis.org/miano/americabashers2 The American-Bashers Revisited By John Miano, December 15, 2009 Recently I authored a posting titled "The American-Bashers," describing how those who seek to increase the supply of cheap foreign labor in technical fields have resorted to name-calling and the bashing of U.S. natives to promote their agenda. Apparently to prove my point, "The Startup Visa and Why the Xenophobes Need to Go Back into Their Caves" by Vivek Wadhwa appeared just two days later. Its content reflects the current marketing campaign to sell more cheap foreign labor by promoting it as "entrepreneurs." The core of the spin used to sell cheap foreign labor is to put lipstick on a pig. An H-1B visa requires "attainment of a bachelor's or higher degree" [8 U.S.C. § 1184(i)(1)(B)]. A BS from India's extensive network of correspondence schools is all the education it takes. Promoters of increasing foreign labor describe this level of achievement as being the "best and brightest." In actuality, the U.S. already has visas for the best and brightest (the O visa) with no numeric limits whatsoever [8 U.S.C. § 1101(a)(15)(O)]. A large number of people actually do get O visas. In 2007 there were 46,533 O visa admissions. (An admission is one entry into the U.S., not actual visas approved - there were 461,730 H-1B admissions that year.) The ratio of O to H-1B (about 1:10) is surprisingly high. Thus, anyone being excluded from getting a visa because of quotas is not among the "best and brightest" because, if they were, they would be able to get an O visa. (It is also worth noting that there is no wait for employment-based green cards in the first preference, which is the permanent-resident equivalent of the O visa). Few people who are trying to sell the need for more foreign labor ever want to mention the O visa because it undermines the argument that the U.S. is blocking the highly skilled from coming. Mr. Wadhwa is one of the few to take the plunge. In doing so, in the piece referenced above, he engages in flights of fantasy to explain how O visas are inadequate (and why we need entrepreneur visas): Now let's discuss the genius visa. Any immigration attorney will tell you that qualifying for this visa is so hard that even Einstein wouldn't have cut it. In truth, any immigration lawyer who would make such a statement is so incompetent that he should not be consulted for anything, including how to tie a shoe. While a Nobel Prize is not required for an O visa, it can be used to demonstrate eligibility [8 C.F.R. § 214.2(0)(3)(iii)]. Einstein's 1921 Nobel Prize in Physics would qualify him for an O visa today (Einstein came to the U.S. in 1936). And clearly, many people without Nobel prizes get O visas. Wadhwa describes the O visa requirements as, "You've got to have a perfect academic record, have topped every class you took and have as many as 10 independent authorities say you walk on water." Good grades and academic record are not even among the eligibility criteria for an O visa and the 10 independent authorities is pure invention [8 C.F.R. 5 § 214.2(0)(3)(iii)]. In short, Mr. Wadhwa's description of O visa requirements is simply nonsense - I have included the text of the regulations at the end of this posting to demonstrate the absurdity of his characterization of them. Mr. Wadhwa's text suggests that his criticism of the O visa originates because he would not have been eligible for such a visa to come to the United States. Wadhwa states "I don't know my total value-add to the American economy but I certainly added hundreds of millions of dollars over the life of my two startups." I would venture to guess that Mr. Wadhwa's investors would not agree with that assessment. His last startup, Relativity, received more than $24 million in venture capital. The husk of the company was recently sold for $9.7 million. I point out the pounding Mr. Wadhwa's investors took to illustrate that entrepreneurship is hit-and-miss. If free market venture capitalists cannot reliably pick winners, how can we expect the Congress and the regulatory bureaucracy to do so? There is simply too much chance involved in predicting corporate success to base immigration policy on potential entrepreneurship. What is more, the current investor visa is already filled with abuse. If you look at where immigrant entrepreneurs come from, the uselessness of an "entrepreneur visa" becomes quickly apparent. Smart Money published a list of 10 companies founded by immigrants: o Carnival Cruises o DuPont o eBay o Google o Intel o nVidia o Pfizer o Procter & Gamble o U.S. Steel o Yahoo This list appears to either be the source of or have common origins with the talking points sheets for the entrepreneur visa push; see here, here, and here. For brevity I am going to omit DuPont, Pfizer, Procter & Gamble, and U.S. Steel from further discussion as these companies were all founded in the 19th Century and the immigration policies in place then have little relation to those we have now. This leaves Carnival Cruises, eBay, Google, nVidia, Yahoo - and Intel, that I save for last. Ted Arison, the founder of Carnival Cruises, is the only founder in this list who comes close to fitting the model of a potential entrepreneur-visa immigrant. He came to the U.S. around age 20; made his fortune after "The Love Boat" television series invigorated cruise lines; and then renounced his U.S. citizenship to avoid taxes - which probably why Arison is never mentioned in the push for visas. Among the others founders on the list: o Pierre Omidyar, founder of eBay came to the U.S. with his parents at age six. o Jerry Yang, co-founder of Yahoo: came with the U.S. as a child at age 8. o Sergey Brin, co-founder of Google: Immigrated with his parents at age 6. o Jen-Hsun Huang, co-founder of nVidia: also came to the U.S. as a child. Then we come to Intel. Smart Money discusses "Co-founder: Andy Grove." According to Intel, its founders were Robert Noyce and Gordon Moore - two native-born Americans. Dr. Grove, who came to the U.S. as a refugee in his 20s, was a very early employee of Intel and Intel states that "Dr. Grove participated in the founding of Intel." This expansion of who is a founder from those who actual start the company to include those who were there early on highlights a point I made previously: that if you measure immigrant entrepreneurship by the percentage of companies that have at least one immigrant founder (rather than by their percentage of founders) you get an artificially inflated result. This expansion of the definition of a founder further skews these results. But notice here that the dominant feature of the current high-profile immigrant entrepreneurs is that they came here as children. There is no mystery here: As the percentage of immigrants in the population has risen, the percentage of immigrant entrepreneurs has followed along. The fundamental problem with the entrepreneur visa idea is that no one has a system that can identify which six-year-old child immigrant is going to grow up to create a successful startup. This is not to say that the immigration system should not be skills-driven - it should. However, immigration based upon something as chance-driven as entrepreneurship is fundamentally poor public policy. * * * O Visa Requirements, 8 C.F.R. § 214.2(0)(3): (iii) Evidentiary criteria for an O-1 alien of extraordinary ability in the fields of science, education, business, or athletics. An alien of extraordinary ability in the fields of science, education, business, or athletics must demonstrate sustained national or international acclaim and recognition for achievements in the field of expertise by providing evidence of: (A) Receipt of a major, internationally recognized award, such as the Nobel Prize; or (B) At least three of the following forms of documentation: (1) Documentation of the alien's receipt of nationally or internationally recognized prizes or awards for excellence in the field of endeavor; (2) Documentation of the alien's membership in associations in the field for which classification is sought, which require outstanding achievements of their members, as judged by recognized national or international experts in their disciplines or fields; (3) Published material in professional or major trade publications or major media about the alien, relating to the alien's work in the field for which classification is sought, which shall include the title, date, and author of such published material, and any necessary translation; (4) Evidence of the alien's participation on a panel, or individually, as a judge of the work of others in the same or in an allied field of specialization to that for which classification is sought; (5) Evidence of the alien's original scientific, scholarly, or business-related contributions of major significance in the field; (6) Evidence of the alien's authorship of scholarly articles in the field, in professional journals, or other major media; (7) Evidence that the alien has been employed in a critical or essential capacity for organizations and establishments that have a distinguished reputation; (8) Evidence that the alien has either commanded a high salary or will command a high salary or other remuneration for services, evidenced by contracts or other reliable evidence. (C) If the criteria in paragraph (o)(3)(iii) of this section do not readily apply to the beneficiary's occupation, the petitioner may submit comparable evidence in order to establish the beneficiary's eligibility. * John Miano's blog The Center for Immigration Studies is an independent, non-partisan, non-profit research organization founded in 1985. It is the nation's only think tank devoted exclusively to research and policy analysis of the economic, social, demographic, fiscal, and other impacts of immigration on the United States. http://www.techcrunch.com/2009/12/05/the-startup-visa-and-why-the-xenophobes-need-to-go-back-into-their-caves/ The Startup Visa And Why The Xenophobes Need To Go Back Into Their Caves by Vivek Wadhwa on December 5, 2009 Immigration Every time I publish a research paper on immigration or write an article for BusinessWeek or TechCrunch, the xenophobes rush out of their caves to launch mindless attacks. They fill the comment sections with bile, send me nasty emails and sometimes threaten to do me harm. I was convinced that my last BusinessWeek column on the Startup visa presented such a compelling argument that even these poor souls would support it. After all, this visa is about creating American jobs and moving innovation here which would otherwise happen in other countries. We can boost the economy without any cost to taxpayers. It's not about admitting H-1B visa holders who sometimes make Americans compete for high-paying jobs, but bringing in entrepreneurs who expand the pie for everyone. Not only do the Democrats support this, but so do the Republicans (their thought leader, Newt Gingrich blogged about my previous TechCrunch post on immigration and his staff told me that he was a supporter of the startup visa). So this seems like a no-brainer. But, no, logic doesn't prevail with this crowd. I got the same stream of hate mail that I'm used to, and the xenophobes hijacked the BusinessWeek reader feedback section again. Most of their statements are illogical and uneducated. But there are two potentially meaningful arguments which opponents of the startup visa make, which are worth discussing: that the founders we are bringing in aren't always the "best and brightest" and that there is already a visa category for geniuses called the O-1 visa. I know we're not always bringing in the best and brightest. Most are just average techies. I can offer myself up as an example. When I came to this country in 1980 from Australia, I was just a low-level computer programmer. Yes, I took pride in being able to write the slickest Assembler code (anyone remember what this is?). But I was pretty average in my education and skills. I had no PhD. I had no patents. No one would ever have thought of giving me an O-1 visa. But I came, I worked hard, and I learned. And I developed ideas for how to make better software. Years later, technology which I invented formed the basis of a software company which employed over 1,000 people and changed the way enterprise client-server systems were built. I don't know my total value-add to the American economy but I certainly added hundreds of millions of dollars over the life of my two startups. And now I'm giving back to America by contributing my time and energy to 3 great universities, Duke, Harvard and UC-Berkeley. Now let's discuss the genius visa. Any immigration attorney will tell you that qualifying for this visa is so hard that even Einstein wouldn't have cut it. You've got to have a perfect academic record, have topped every class you took and have as many as 10 independent authorities say you walk on water. I happened to meet someone at a talk I gave at Berkeley last week, who qualified for this. He has a remarkable story which shows how screwed up our immigration system is. Alex Kosorukoff learned programming in high school in Russia and started working part-time as a software developer. He later joined Ivanovo State Power University and worked part-time as a researcher in a Russian-American joint venture. He came across several American books on entrepreneurship, read them, and started thinking about becoming an entrepreneur. Alex persuaded two friends to start a company in 1991. (Let me remind you that this was very, very early in the transition in Russia from Communism to Democracy). They built accounting software which became a big hit. Alex rode the rising tide of entrepreneurship and launched several other companies. In 1995, he won a U.S. Information Agency "Business for Russia" contest. Part of the prize was an exchange program at Syracuse University's Maxwell School. He came to the U.S. for 2 months, learned more about American business and went back home to solve some of our problems. (Like nearly all foreigners who come here, he fell in love with America and wanted to share the American Dream). Alex started researching why organizations struggle to scale well, why decision processes become more inefficient and why talented employees leave. Alex looked around at the natural world and noticed that biological organisms do a better job of scaling up. He designed a form of participatory organization based on evolutionary algorithms and prototyped it with a website that attracted hundreds of participants in 1998-99. His research was discovered by Prof. David Goldberg (University of Illinois), who invited the young Russian to join his lab. Dr. Goldberg's lab was amongst the top in the field of evolutionary computation. Alex expected he would have the best of both worlds by coming to America--performing groundbreaking research and becoming an American-style entrepreneur. Once he got to Illinois, however, Alex realized that neither his academic research aspirations nor his entrepreneurial ambitions would be completely fulfilled. The university told Alex that he could not work outside the strict classification of his visa, could perform no side work, and definitely could not launch a company. "They even told me I couldn't continue to run my website, since it had ad-generated income. I had to move it to Taiwan and have a friend over there run it for me," Alex explains. Since the focus of his research was forming companies using evolutionary computation, Alex realized he would not be able to take his theorems and try them out in the real world, as he had done in Russia. "I had to postpone all my entrepreneurial activities and resort to simulation and doing related evolutionary computation research for other professors, but that meant a big switch away from my main area of interest," says Alex. Still, he managed to win a number of awards for his research. StumbleUpon In fact, Alex's work did manage to stimulate entrepreneurial activity. Garrett Camp, who founded Stumbleupon, read Alex's work and used parts of it in conceiving a social sharing company which ultimately sold to EBay for $75 million. If you take Camp at his word, Alex may have been modest in telling me this story. Says Camp, "Alex pioneered the concept of human-based computation. His work on human-based genetic algorithms provided a lot of insight during the design of StumbleUpon, and I referenced several of his papers in my Masters thesis". After Alex finished his Ph.D., he got an offer from StumbleUpon (ironically, a company that was founded in Canada in 2001 and later relocated to Silicon Valley). StumbleUpon uses human-based evolutionary computation techniques as does Wikipedia. Alex was clearly grateful for the offer. But it's pretty easy to tell that he is itching to start his own company, something he's done successfully several times before in Russia in what might be considered a far harsher business environment. So what's he doing right now? Waiting for his green card to be approved. In the meantime, the unemployment rate in California is now over 12%, a near record high. The national rate is at 10%. Credit markets are totally frozen and small businesses--the most dynamic part of the U.S. economy are suffocating for lack of operating capital. So slightly tweaking a law to allow smart foreigners to jumpstart our economy would seem to be a really easy decision politically and economically. Rather than listening to the emotion of misguided anti-immigrants, we need to listen to reason. After all, it is immigrants like Alex who have started 52% of Silicon Valley's tech companies in recent times. Editor's note: Guest writer Vivek Wadhwa is an entrepreneur turned academic. He is a Visiting Scholar at UC-Berkeley, Senior Research Associate at Harvard Law School and Director of Research at the Center for Entrepreneurship and Research Commercialization at Duke University.